"He [the Australian] said he got it from one of the people on the street," Mr Sumara told reporters.

"We will check with his group whether he is part of schoolies or not."

The punishment for possessing illicit drugs in Bali can be severe, with offenders facing up to 12 years in prison and fines ranging up to $800,000.

The 18-year-old reportedly arrived in Bali on Sunday.

Balinese police have warned young Aussies arriving celebrating schoolies in Bali to stay away from drugs and criminal activity. No charges have been laid against the 18-year-old while authorities wait for the substance to be tested.